Are you eligible for higher UK annuity rates? Because many more people are eligible for higher annuity rates these days owing to the increasing number of factors now taken into account in the calculation of annuity rates, including: ill health, if you smoke, your lifestyle (weight, for example), and where you live. This is leading to more individual underwriting. See our new quick reference guide on the homepage.  

Ill health is one of the key factors for getting higher pension annuity rates, and the more severe the ill health, the higher those annuity rates. To illustrate the higher rates available there are some example quotes on the annuity rates pages of this website. Ill health, along with the other above factors, has an effect on your life expectancy, and, the shorter your life expectancy, the higher the annuity income, because the anticipation is that it will be paid for a shorter period of time.

You could increase your annuity income by up to 30%, or perhaps even more, and that means a higher income every year for the rest of your life. Find out if you might be eligible for higher annuity rates and how much that could mean to you. Don’t be one of the 40% of people at retirement who qualify for higher annuity rates, but don’t even bother to apply. We can help you achieve a better annuity income. Just contact us, and let one of our advisers help you discover just how much extra annuity income you might be eligible for. If you’re not eligible for these higher annuity rates, we’re confident we can obtain better rates than those from your current pension provider.

The best UK annuity rates paying not a lot plus the State pension is unfortunately what many people in retirement have to rely on. Actually, 1 in 5 of retirees rely on State pension, not having sufficient annuity income. The findings from Aviva’s recent research are backed-up by those from another leading life company, Prudential. Almost a fifth of people retiring in 2010 will have no employer or personal pension or savings to live off on top of their State pension. The basic State pension pays £95.25 per week, and for a married couple it is £152.30. That compares poorly with average spending by a retiree aged 65 to 75 of around £321 per week.

As so many people expect to retire on the basic state pension alone, particularly when only half know how much it actually pays, there is still a clear need for people to understand the financial consequences of not making adequate provision for their time in retirement, comments Martyn Bogira, of Prudential. The Pensions Policy Institute (PPI) agrees that an increasing number of retirees will find themselves without the financial means to have the standard of living that they want. Younger people who can still do something to increase their pension savings should consider the problems afflicting those people about to retire. UK annuity rates alone, be they high or low, aren’t really going to matter a jot if there just isn’t a pension fund in place.

How to go about getting the best conventional standard annuity rates. These rates apply if you’re of good health and non-smoking, but they do vary a great deal, and you could obtain rates up to 20% higher than the annuity quote from your existing pension provider. Certain lifestyle issues could result in you getting higher annuity rates. All you have to do is transfer your hard earned pension fund to a different annuity provider. With conventional standard annuity rates there’s a massive difference between some of the better annuity rates and some of the worse ones. This difference can result in thousands of pounds of wasted retirement income. So who do you buy your annuity from in order to get the best annuity rates?

There’s actually only a small number of annuity providers consistently near or at the top of published annuity league tables, and these include: Aegon Scottish Equitable, Aviva (was Norwich Union), Canada Life, Legal & General, and Prudential. Buying your annuity from one of these well known companies could result in a 20% increase in your retirement income. Some of these companies also offer annuity rates based on your postcode with rates depending on where you live.

Those living in less wealthy areas could be better off by between 5% – 10% as a result. This is seen as a move in the direction of individual underwriting. However, there are also companies you should not be buying your annuity from because of the very low standard annuity rates they offer. These include: Axa, Friends Provident, and the well respected Scottish Widows; though there are others to avoid.

A conventional annuity is a lifetime annuity, in that it pays out an annuity income for life. It is the most common annuity product in the UK, primarily because you will know from day one of the arrangement just how much income you will receive each year for the rest of your life. This security allows retirees to plan their retirement and living standards accordingly. The main advantages are: the predictability of a fixed monthly annuity income; the knowledge that you will always have an income in your retirement and not ‘outlive’ you pension savings; you can take a cash-free lump sum at the start of the scheme; and you can take an increasing income option, though with a lower initial income.

The main disadvantages of a conventional annuity are: you cannot allow for changing circumstances, such as steep rises in inflation or personal issues; it cannot be changed or adjusted to take advantage of potential future investment returns; any death benefits will mean a lower starting income which cannot be altered once chosen. With regards to death benefits, you can select a spouse’s pension up to 100% of the pension you had received, and, if you die within a certain timescale, say 5 or 10 years, of taking out the annuity, the payments you would have received are actaually paid to your estate. We also now have Value Protection, which means, if you die before age 75 the starting pension fund value (minus the gross annuity payments already received) can be paid out, subject to a pretty high flat rate of tax of 35%.

In the world of pension annuities; what is an inflation proof annuity? As you might gather, they are designed to protect against the possible ravages of ongoing inflation. Whilst you can build in annual increases under a standard or conventional annuity, these will probably not match the level of inflation. An inflation-proof annuity will keep its real value throughout the life of the annuity as it is linked to annual changes in the Retail Prices Index (RPI). Therefore, any annual rises in inflation will be matched by a rise in your annual annuity income.

The main advantages of inflation proof pension annuities are that they will provide an income for the rest of your life whilst protecting your buying power. They will help protect against high inflation and price rises. There are some disadvantages; the initial annuity income will be lower when compared to a level conventional annuity; the annuity rates you get will be based on a forecast of future inflation, and, unless you take out a guarantee against zero inflation, if the inflation rate were to hit 0% or go below then your income would go down. In addition, it’s probably fair to say that the RPI is not always the best barometer of pensioner income or spending levels.